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High Court of Fiji |
IN THE HIGH COURT OF FIJI
WESTERN DIVISION AT LAUTOKA
CIVIL JURISDICTION
CIVIL ACTION NO. HBC 261 OF 2006
BETWEEN RANJIT SINGH formerly of Lautoka, Fiji, but now residing in Toronto, Canada, Accountant. |
PLAINTIFF AND |
PYARA SINGH of Lautoka, Company Director. |
DEFENDANT |
Appearances : Mr A. K. Narayan with Mr A. Narayan for the plaintiff
Mr R. Gordon with Mr W. Pillay for the defendant
Date of Trial : 30 & 31 October 2017
Date of Submission : 19 January 2018 by the plaintiff
Date of Judgment : 7 May 2018
J U D G M E N T
Introduction
[01] On 29 August 2006, the plaintiff, Ranjit Singh filed a writ of summons with the statement of claim endorsed against the defendant, Pyara Singh alleging breach of acknowledgement of debt. The plaintiff claimed that the defendant in breach of his duties and/or obligations as the lawful attorney to the plaintiff and acknowledgement of debts refused to pay the sum of monies owing to the plaintiff. On 12 May 2015, the plaintiff, with the leave of the court, filed his second amended statement of claim whereby the plaintiff had pleaded two subsequent acknowledgements of debts executed by the defendant on 2 July 2001 and 2 July 2002, while the case was pending. The plaintiff seeks among other things the recovery of the sum of FJ$678,389.16 from the defendant with interest.
[02] On 27 May 2015, the defendant filed a statement of defence to the second amended statement claim. In his defence, the defendant easily denies the plaintiff’s allegations and says that he does not owe the plaintiff any sum of money for the sale of the property described in the claim; also he puts the plaintiff to the strict proof thereof.
[03] The court set down two days for trial, i.e. 30 & 31 October 2017. On 30 October 2017, the trial commenced, when the parties requested to adjourn the matter to the following day as the finalisation of the agreed bundle of documents (‘ABoD’) was going on. The defendant was present in court and there was no complaint of the ill health of the defendant. I adjourned the trial until next day (31 October 2017) as requested by the parties to finalise the ABoD.
Application for Adjournment
[04] When the parties appeared the following day to commence the trial, Mr Gordon counsel for the defendant made an oral application to adjourn the trial on the ground that the defendant was unwell and was being medically examined at the Lautoka Hospital. At this stage, the defendant's counsel did not have any medical evidence to support the application. However, during the course of the day, the defendant's counsel tendered a so-called medical certificate without even mentioning the name of the medical practitioner who examined the defendant. The so-called medical certificate without describing the nature of the ailment simply states that: ‘... Pyara Singh unfit to attend court for 2 days.’
[05] Mr Narayan, counsel for the plaintiff objected to this application on the basis that the defendant was a known absentee. He referred to the High Court decision in Mishra Prakash & Associates v Lautoka General Transport Company Limited (HC Civil Action No. HBC 136 of 2011 (1 February 2011)), where the defendant (Pyara) failed to show up at trial. That was a case where the defendant company had failed to pay for legal fees for services rendered by Mishra Prakash & Associates.
[06] After hearing both parties on the application for adjournment, I declined to grant the adjournment. When refusing to adjourn the trial, I considered the following facts: 1. the age of the plaintiff (he is 70 years old), 2. The age of the proceedings (the proceedings were initiated in August 2006), 3. The defendant was not admitted to hospital and was merely there for a medical check-up. 4. The plaintiff had come from Canada to appear at the trial. 5. The matter was fixed for trial six months ago. 6. The application for trial was made in the eleventh hour without any formal application supported by the affidavit. 7. The medical sick sheet tendered by the defendant’s counsel during the course of the trial did not disclose any illness or diagnosis.
[07] Upon the conclusion of the trial, the parties agreed to file their respective written submissions. Accordingly, I directed the parties to file their submissions within 28 days. Only the plaintiff had filed the written submissions. The defendant did not file any submissions.
The Background Facts
[08] The background facts as stated in the statement of claim are as follows:
[09] In his defence, the defendant has pleaded that:
The Law
[10] Sections 12 and 13 of the Limitation Act 1971 (‘LIM ’) would be relevant to this case. These sections deal with acknowledgement and part payment and fresh accrual of action on acknowledgement or part payment.
[11] So far as relevant, LIM 12 provides that:
“12 (1)...
(2)...
(3) Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share of interest herein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgement or the last payment, provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder then due, but any payment of interest shall be treated as a payment in respect of the principal debt.” (Emphasis added)
The Evidence
[12] At the commencement of the second-day trial, the parties tendered an ABoD which comprises 20 documents marked as ‘PEx1-PEx20’. In addition, the plaintiff tendered a Department of Immigration Boarder Control Travel History (‘Travel History’) marked as ‘PEx21’.
[13] The defendant tendered the original copy of the power of attorney which was marked in evidence as ‘DEx1’.
[14] At the trial, the defendant did not give evidence in support of his defence. Nor did he call any witnesses to give evidence on his behalf. The plaintiff, Ranjit Singh (‘PW1’) gave oral evidence.
Plaintiff’s evidence
[15] PW1 in his evidence in chief states:
[16] During the cross-examination, PW1 states:
[17] Under re-examination, PW1 states: Pyara did not ask to ratify the acts he had done under the authority of the PoA. Pyara gave him 10 drafts (PEx8) at the Westpac Bank. The bank had processed the bank drafts on Pyara’s instructions. Pyara came to the bank with various people he did not know. He did not know the applicant who is noted as “Praveen Chand c/o Lautoka General Transport” in PEx8). He clarified that he received no money until Pyara handed him the 10 bank drafts. He clarified that the figures and signatures endorsed on the document (PEx5) were correct. He also clarified that although Gurdeo Singh was named in PEx 13, he did not end up buying his shares and that was why Gurdeo Singh did not sign the agreement.
Discussion
[18] To begin with, I should say that the 75-year-old plaintiff gave clear and straightforward evidence against the defendant, his biological brother. The plaintiff was cross-examined by the defendant’s counsel but he was unshaken and stood firm in his evidence. I had the opportunity to observe the plaintiff’s manners during the course of his evidence and I found him to be answering the cross-examination questions promptly, clearly and coherently. Therefore, I find him to be a truthful witness.
[19] As mentioned earlier, the defendant was not present in court on the second day of the trial. He did not give evidence in support of his defence. Nor did he produce any documents except for the original copy of the PoA (DEx1) which was marked during the cross-examination of the plaintiff through his counsel.
[20] The claim relates to the Acknowledgement of Debt signed by the defendant in favour of the plaintiff. On 18 November 1974, the plaintiff appointed the defendant, his biological brother as his true attorney as evidenced by the Power of Attorney (‘PoA’) given by the plaintiff. The defendant had the original of the PoA with him and the plaintiff a copy of it. At the trial, the defendant marked and produced the original document as ‘DEx1’, while the plaintiff marked and produced a copy of the document as ‘PEx3’. According to the PoA, the donee (the defendant) had absolute unrestricted and unconditional power and authority to act on behalf of the grantor (the plaintiff) pertaining to money and properties including real and personal.
Sale of property
[21] Before his migration to Canada in October 1974, the plaintiff instructed the defendant as his lawful attorney to complete the sale of his (plaintiff’s) dwelling house at Savala Street, Lautoka for the sum of $84,000.00. It is alleged that the defendant completed the sale and transferred the property on behalf of the plaintiff by virtue of the PoA and obtained the proceeds of the sale but refused to pay to the plaintiff.
[22] The defendant denied acting in the transfer of the property and receiving the proceeds of the sale. It will be noted that the instrument of transfer (PEx2) has the defendant’s signature and it clearly says he signed and endorsed on behalf of the plaintiff. The documentary evidence clearly shows that the defendant signed and transferred the property on behalf of the plaintiff in the exercise of the PoA. The defendant also denies receiving the sale of the proceeds. The evidence before the court is that the defendant had authorised J R Reddy and Associates, the firm that acted for the vendor to release the proceeds of the sale to the Company in which he (defendant) is a major shareholder. There is no evidence that the plaintiff ever authorised the release of the sale proceeds to the Company. On the evidence, having been satisfied on the balance of probability, I find that the defendant transferred the property on behalf of the plaintiff by virtue of the PoA and authorised the release of the proceeds of the sale to the Company without the plaintiff’s consent and approval. There is also no evidence that the plaintiff ever ratified the transfer of the fund to the Company. The plaintiff did not authorise the defendant to release the sale proceeds to the Company. The plaintiff only authorised to complete the sale and remit the money to Canada. By authorising the release of the sale proceeds to the Company, the defendant had acted outside of his authority given by the plaintiff by way of the PoA and that he had dishonestly misappropriated the funds for his own benefit.
[23] The defendant in his defence while denying transferring the money to the Company says Malkit Singh was advised to obtain the sum of monies and deposit it into the Company account. In his evidence, the plaintiff denied advising Makit Singh to obtain the money and deposit it into the Company account. The plaintiff could not have given such an advice to Malkit Singh because the plaintiff had the PoA to act for the plaintiff, not Malkit Singh. The law firm would not have released the money to the Company on the advice of Malkit Singh as he had not PoA from the plaintiff. It was the defendant who had given the authority (PEx11) to the solicitors to release the money that was in the solicitor’s trust account to the Company. Therefore, I reject the defence that Malkit Singh advised the solicitors to release the money to the Company as false.
[24] The defendant pleaded that the plaintiff is also a 25% shareholder of the Lautoka General Transport. According to the plaintiff: he was a shareholder up until 1996. He sold his shares in 1996. There is no evidence before the court that the plaintiff has been a shareholder even after 1996. The defendant did not call the Registrar of Companies to produce evidence in support of his allegation that the plaintiff is also a 25% shareholder of the Company. On the evidence, having been satisfied on the balance of probability, I find that the plaintiff has not been a 25% shareholder of the Company after the sale of his shares in 1996.
Acknowledgement of Debts
[25] As far as the acknowledgement of debts are concerned, the defendant put the ‘plaintiff to strict proof of the same.’ A civil claim is to be proved on the balance of probability, the civil standard of proof. In civil law, there is no proof called ‘strict proof.’ What is the standard of such proof? Civil law only recognises proof on the balance of probability and not more than that. There is evidence in court that the defendant signed the acknowledgments of debts. The defendant had not pleaded that he did not sign the AoDs or that it was obtained by fraud, undue influence or otherwise. The signatures of the defendant in the AoDs have not been challenged or rebutted. In the absence of such evidence, I accept the plaintiff’s evidence that the defendant signed the AoDs in the presence of the plaintiff. On the evidence, having been satisfied on the balance of probability, I find the defendant signed the acknowledgement of debts voluntarily.
[26] In the statement of claim, the plaintiff claims a sum of FJ$678,389.16 with interest at the rate of 13% per annum as agreed from 2 July 2014 till the date of the payment. However, the plaintiff in his submissions claim 13% interest from 6 May 2015 on the sum claimed. This claim is based on the third and last AoD, the defendant signed on or about 2 July 2002 (‘PEx6). By that AoD, the defendant acknowledges that he owe the plaintiff the sum of $617,367.59 (total owing on sale on shares and partnership and interest) as at 2 July 2002. The plaintiff’s claim is based on this acknowledgement.
[27] Previously, the defendant had executed two more AoDs. The defendant signed the first AoD on 6 August 1997 (PEx4), where the defendant together with Malkit Singh (his brother) agreed with consent to the plaintiff the sum of $450,000.00 on 30 June 1998, which sum included the purchase of the plaintiff’s 25% shares in Lautoka General Transport Co Ltd, the sum of $83,460.00, being the sale of the house in Savala Street and interest. The defendant did pay as agreed by 30 June 1998. Upon demand by the plaintiff, the defendant executed the second AoD on 2 July 2002 (PEx5) whereby he admits and acknowledges that as at 2 July 2002, the sum of $684,846.00 as owing and full payment due to the plaintiff.
[28] By signing the third AoD on 2 July 2001, the defendant had renewed his previous AoD. According to the latest AoD, the defendant acknowledges a sum of $617,367.59 as debt payable to the plaintiff. When signing the last AoD, the defendant had used the Company seal for one reason or the other. The seal used there does not appear to be the Company’s common seal. The seal appears to be the one that is used for signing cheques/vouchers on behalf of the Company. The defendant does not sign there for and on behalf of the Company with approval of the Company. Above all, the plaintiff’s evidence is abundantly clear in this regards. The plaintiff said he was only dealing with the defendant and not with the Company. On the evidence and having been satisfied on a balance of probability, I find that the defendant signed the AoDs on his own behalf not on behalf of the Company and that when he signed it he was well aware of the contents of it and accepted that he owed the plaintiff the sum stated therein.
[29] Significantly, the defendant could not have assigned the debt or the liability to pay the debt to the Company without consent of the plaintiff.
[30] The House of Lords in Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1993] UKHL 4 (22 July 1993), [1993] 3 All ER 417 said:
“It is trite law that it is, in any event, impossible to assign “the contract” as a whole, i.e. including both burden and benefit. The burden of a contract can never be assigned without the consent of the other party to the contract in which event such consent will give rise to a novation.”
[31] Even if the defendant had intended to assign the debt to the Company, it would have been impossible for him to do so without consent of the plaintiff. The plaintiff said he was only dealing with the defendant and not with the Company.
[32] The court need not consider the actual circumstances giving rise to the AoDs. In Brij Ram v Suruj Narayan (High Court Civil Action No. 92 of 1988), which was later approved at the Court of Appeal (Narayan v Ram [1993] FJCA 22; Abu0045o.92s (13 August 1993) , Saunders J held:
“The agreement is perfectly clear. It is properly initialled and it was signed by both parties in the presence of and attested by M Raj Kumar, a legal practitioner of Ba. It is an acknowledgement of debt and agreement to pay that debt by a certain date.
The Defendant, by his defence as amended, sought to make the plaintiff prove the actual circumstances of the loan. Only in paragraphs 14 & 16, which are repetitive, did he seek to show that agreement was not read over to him and that he thought he was signing a document renouncing his share in his father’s estate.
....
As a general rule mistake as to the legal effect of what you are signing, when you have read the document, does not avail POWEL v SMITH (1872) [1872] UKLawRpEq 90; LR 14 Eq 85, and as SCRUTTON L.J. said in BLAY v POLLARD & MORRIS IK.B. 628 at 633 “It would be very dangerous to allow a man over the age of legal infancy to escape from the legal effect of a document he has, after reading it, signed in the absence of an express misrepresentation by the other party of that legal effect.”
...
The law is clear. Extrinsic evidence cannot be received in order to prove that the intention of the parties was other than that appearing on the instrument – see Halsbury 4th Ed Vol 12 para 1478, the case of Henderson v Arthur (1907) IK.B 10 and the many other cases cited.
I am satisfied that defendant is lying when he claims that he did not know what he was signing. I accept the evidence of Mr Kumar. I do not believe that there was any misrepresentation or that defendant made any mistake.”
Limitation
[33] As far as limitation period is concerned, the LIM Act has a specific provision in relation to acknowledgements and part payment. LIM 12 (3) states that ‘where any right of action has accrued to recover any debt ... and the person liable or accountable therefore acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of acknowledgement or the last payment.’
[34] The third AoD made the debt payable on 2 July 2002, with the accrued interest till that date. The defendant had pleaded that he made payment of $100,000.00 on 17 April 2003 (statement of defence incorrectly states the date as ’17 April 2013’). Therefore, it must be construed, in terms of LIM 12 (3), that the right of action for the plaintiff had accrued to recover the debt on 17 April 2003, the date on which the last payment was made by the defendant and not before the date of the acknowledgement.
[35] An action founded on a contract must not be brought after the expiration of 6 years from the date on which the cause of action accrued (see LIM 4). In this case, the cause of action accrued to recover the debt on 17 April 2003. The plaintiff brought this action on 9 August 2006. As such, the plaintiff had brought the action well within the limitation period.
Breach of Duty
[36] The defendant says he has not breached any duties bestowed upon him. It is true that the plaintiff gave a general power of attorney to the defendant. The general power given to the defendant does not necessarily include a power or discretion to convert the proceeds of the sale into the defendant’s own benefit. Although the defendant had the general power to act on behalf of the plaintiff, he was under a duty to follow the plaintiff’s specific instruction in respect of the sale proceeds. The defendant ought to have deposited the money into the plaintiff’s account which the defendant had failed to do. I, therefore, find that the defendant had breached his duties bestowed upon him through the PoA and as a result of the breach the plaintiff suffered loss.
Payment of $100,000.00
[37] The defendant avers that on ’17 April 2013 the plaintiff was paid the sum of $100,000 inclusive of $84,000.00 the purchase price of the property and interest of $16,000.00’ and on that basis, the defendant ‘does not owe the plaintiff any sum of money for the sale of the property.’
[38] The plaintiff does not deny receiving a sum of $100,000.00 from the defendant in April 2003. The plaintiff denied receiving monies from the defendant on 17 April 2013. The plaintiff said he received $100,000.00 in April 2003 in respect of the sale of the shares.
[39] The AoDs have not been challenged by way of defence. The plaintiff’s evidence on the AoDs remains unchallenged. I accept the plaintiff’s evidence as credible.
Defendant’s fear of exposure
[40] With regards to the defendant’ absence on the second day of trial, counsel for the plaintiff Mr Narayan submits that: the defendant is a known absentee. He has been found to be an unreliable witness. This is yet another reason why the application for adjournment on the second day of trial in the present action appeared suspicious. The defendant was present in court on the first day of trial and appeared in good health. Mr Narayan refers to me the case authority of Subhag Wati Singh v Lautoka General Transport Company Limited [2005] FJHC 285, HBC0387.1995 (4 September 2005), where, in respect of Mr Pyara Singh (the defendant in the present case), Finnigan J said:
“That concluded the evidence of Mr Singh and by that time I had concluded he was an unreliable witness. From his demeanour while answering questions from Counsel and the Court and from the inherent contradictions in his answers and from the fact that he himself suggested his brother knew the fact that he himself suggested his brother knew the facts which he did not I am inclined to discount the whole of his evidence. Not only did his demeanour and his replied merit that judgment. In addition, the fact that his claims were raised in September 2005 for the first time after the Defendant’s lawyers pleaded a defence without these claims weighed heavily against credibility.
The claimed failure of the Defendant to keep employment records although it was on notice, together with the complete failure of both counsel for the Defendants to give any notice in advance of the evidence leads me to the firm conclusion that this claimed defence is without substance. I discount the evidence of Mr Singh.” (Emphasis added)
[41] The defendant barely denied signing any cheques for $200,000.00. This cheque was presented to the bank for payment but dishonoured on the ground that there was no fund in the account. The defendant thereafter made immediate payment of $100,000.00 and promised the plaintiff that he will pay the remainder by [that] Friday. The plaintiff never received money by that Friday.
[42] The defendant did not appear in court on the second day of trial to give evidence. Nor did he summons any witnesses to give evidence in support of his defence. In the circumstances, Mr Narayan counsel for the plaintiff invites me to draw an adverse inference that the uncalled evidence would not have assisted the defendant’s case. He refers to me Windeyer J’s judgment regarding the notion of ‘fear of exposure’ in Jones v Dunkel [1959] HCA8; [1959] HCA 8; (1959) 101 CLR 298 (3 March 1959), he quotes Wigmore on Evidence:
“The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby elucidate, serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstances or document or witness, if brought, would have exposed facts unfavourable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions; and they are also open always to explanation by circumstances which made some hypothesis a more natural one than the party’s fear of exposure. But the propriety of such an inference in general is not doubted.”
[43] In Subhag Wati Singh (above), the court found the defendant (Pyara) to be an ‘unreliable’ witness. The defendant did not come to court to give evidence in support of his defence. The defendant did not call any other witnesses to give evidence on his behalf, either. The failure of the defendant to give evidence or failure to call witnesses to give evidence on his behalf remains unexplained. In the circumstances, it is appropriate to infer that the uncalled evidence would not have assisted the defendant’s case. I so do. I reject and disregard the defence raised in the statement of defence as bare denial.
Conclusion
[44] It is for these reasons; I conclude that the plaintiff has, on the balance of probability, sufficiently proved his claim. Accordingly, I enter judgment in favour of the plaintiff. He is entitled to claim the sum of FJ$678,389.16, being the debt inclusive of accrued interest calculated at the agreed interest rate of 13% per annum, as at 6 May 2015. This sum does not include $100,000.00 the defendant paid to the plaintiff. Further, the plaintiff will also be entitled to interest on the judgment sum at the agreed rate of 13% per annum from 6 May 2015 till the date of this judgment.
Costs
[45] The plaintiff asks for costs on a full solicitor/client indemnity basis to be assessed. Counsel for the plaintiff submits that the plaintiff is 75 years old and the defendant gave false assurance and promise for monies that were rightfully due to him, and justice has evaded him for two decades.
[46] It appears that the defendant took deliberate and calculated risk to defend the proceedings and eventually failed to give evidence on payment of the debt he admitted through the acknowledgement of debt. The defendant’s conduct in the proceedings was deplorable. He was present in court on the first day of trial but deliberately failed to appear on the second day of the trial when he had to give evidence in support of his defence.
[47] In my opinion, this is an appropriate case to order for costs on a solicitor/client basis, which is to be assessed before the Master, if not agreed.
The Result
DATED THIS 7TH DAY OF MAY 2018 AT LAUTOKA.
.......................................
M. H. Mohamed Ajmeer
JUDGE
Solicitor:
For the plaintiff: Messrs AK Lawyers, Barristers and Solicitors
For the defendant: Messrs Gordon & Co, Barristers and Solicitors
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